CAVUTO: What do you make of — of this sudden turn in — in retail sales? One month does not a trend make, but it does disrupt a trend that had been fairly positive. What's going on?

BERNSTEIN: Well, I think you're right in terms of the one month.

I think you have to take an average of the past few months. Basically, what happened in March and April is, we gave back some of the gains we made in — in January and February. And, in fact, retail sales is point-three-tenths — basically, just where it was last December. That's not a great news, by any stretch of the imagination.

But it's — it's — it's better than the kinds of large-scale declines we were getting on a monthly basis towards the end of last year. So, I would argue that this is another sign of a market that's just not falling as fast as it was before, but not quite stable either.

CAVUTO: There are many in your party who are arguing it needs still more stimulus. Now, they were making the same point when we were getting good numbers to say, well, if that's what the stimulus gets you, we need more of it.

Where do you stand?

BERNSTEIN: We have to let this package, the American Reinvestment Recovery Act, do its thing. We're not even at the 100-day mark yet of the $787 billion package.

Contrary to one of the reports you were citing earlier, the package is spending out quickly, effectively. The oversight is in place. We're on track to create or save...

CAVUTO: Why do you say — Wait. Wait. Wait.

BERNSTEIN: Let me...

CAVUTO: Why do you say it's spending out quickly? I thought only about, really, the core things, $10 million...

BERNSTEIN: Yes.

CAVUTO: ... has actually land in — in shovel-ready projects, where we're actually picking up the shovel that we paid for.

There has been $88 billion obligated thus far. Now, some of the commentary has been about money that's been disbursed vs. money that's been obligated.

CAVUTO: Right.

BERNSTEIN: So, let me quickly take you through this argument.

Suppose I get a job, and, in two weeks, they tell me I'm going to get my first paycheck. That means that that first paycheck is obligated. I know I'm going to get it, but I'm not going to see the disbursement until two weeks hence.

Now, over that two-week period, I know waiting for me is a paycheck. And I'm going to start using that money to do the consumption, the consuming, and the buying I need to do.

Same thing here. We have $88 billion out the door in contracts, in help to the states, in fiscal relief, in unemployment compensation, food stamps, out the door, in the system, money that will be disbursed. It's under contract. And that's the right number.

CAVUTO: All right, well, let's assume you're right. And you're a very smart guy, so I'm going to make that automatic assumption.

BERNSTEIN: Well, that's a fine — that's a fine assumption.

CAVUTO: And, anticipating all that money to come down the pike, I should be seeing everyone in America spending like drunken sailors. And they are not. What's going on?

BERNSTEIN: Well, you know, that's a great — that's actually an important point, Neil.

One of the things you have at a time like this is that households that were deeply overleveraged — that is, they — they borrowed beyond their means, are now deleveraging. So, they're pulling back on their spending. And we know that they're saving more.

That's precisely why, at a time like this, you need the government to step into the lurch there and to kick up the spending on — on that side of the equation, through fiscal relief to the states, through infrastructure investments, the kinds of tax cuts for 95 percent of working families that helps boost the paychecks of people that are working.

We know that households are going to be saving, so we have to make sure that government spending steps in and temporarily gives the economy the boost it needs, and gets out of the way, let the private sector take over.

CAVUTO: I got you.

Well, Jared, I'm not — I'm not blaming you for trying to deal with the bureaucracy of Washington and how much time it takes to get money...

BERNSTEIN: Thank you.

CAVUTO: ... from what you guys propose to ultimately what average shoppers dispose.

But — but the fact of the matter is that, of the $800 billion promised, actual spending that is being done right now with money allocated to projects is in the millions. It's not in the billions.

Now, you're right to say that money has been allocated and is ready to go, but it's not ready to — to help this economy.

BERNSTEIN: Well...

CAVUTO: Now, what I'm saying to you...

BERNSTEIN: Let — let...

CAVUTO: Let me just ask you this.

BERNSTEIN: Sure.

CAVUTO: Do you think that everyone who had been looking for this stimulus — get it out there, get it out there, get it out there. It was like rush, rush, rush. And now we're discovering that, you know, waiting for Godot. It's hurry up and wait.

BERNSTEIN: I disagree.

Neil, Neil, first of all, let's get some numbers straight. As I said earlier, $88 billion obligated. You came back and said, oh, there's only tens of millions disbursed. No, the fact is...

CAVUTO: That's in the vice president's — what about the big guy's report behind you? Because does he know that it's — let's say you're right. Then it's 10 percent of what was — what was committed.

BERNSTEIN: That's about right.

CAVUTO: What's going on with the other 90 percent?

BERNSTEIN: Well...

(LAUGHTER)

BERNSTEIN: ... you see, this is the funny thing.

Half the time, people are saying, you're spending out so quickly, you can't possibly be doing...

CAVUTO: Right.

BERNSTEIN: ... doing the necessary oversight. The other half is, you're not doing it quickly enough.

On average, we're spending a billion dollars a day, OK? We're obligating a billion dollars a day, on average. I challenge you or anyone watching me right now to come up with any program like this, federal, state or local, that has obligated $90 billion in 77 days, with the level of oversight that we need to enforce this very important tradeoff, because...

(CROSSTALK)

CAVUTO: Well, the reason why, Jared...

BERNSTEIN: Let me finish.

CAVUTO: No, no. No, you're — no, the reason why...

(CROSSTALK)

CAVUTO: ... is a lot of people say that, look, look, look, you know, you're right. You commit a lot of money. They're just not buying your $90 billion figure. And they're buying maybe the Wall Street Journal figure that says it's in the millions, not the billions.

But there might be a difference, semantic-wise, between allocated, and committed, and not committed, or maybe you should be committed. I'm just saying that — that people are looking at this, Jared...

BERNSTEIN: Yes.

CAVUTO: ... and saying, you know, look, you set up high expectations with this stimulus. And they wanted stuff like now, now, now, and it ain't happening.

BERNSTEIN: Well, I actually don't think so.

I mean, first of all, let me just say, some of these — you're acting like we have some sort of like semantical or philosophical difference.

I mean, the Office of Management and Budget knows a lot about the spend-out...

CAVUTO: All right.

BERNSTEIN: ... on the — what's called the FMAP, the federal Medicaid match — we know that $15 million is out the door.

So...

CAVUTO: OK.

BERNSTEIN: So, that's not really a matter of debate.

Now, on the — I actually think the American people have a lot more patience than you give them credit for.

CAVUTO: Well, you might be right, Jared. You might be right.

BERNSTEIN: If you look at some of the polling...

(CROSSTALK)

BERNSTEIN: You know...

(CROSSTALK)

CAVUTO: You might be right.

BERNSTEIN: I think polling results support that.

CAVUTO: OK.

And you argue your point very, very well.

(CROSSTALK)

CAVUTO: Jared, it is always good having you. Thank you very much.

BERNSTEIN: Nice talking to you, Neil. OK.

CAVUTO: Jared Bernstein, Vice President Joe Biden's chief economist.

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